competition

Why Startups Shouldn’t be Afraid of Competition

By Mark Evans in Startups 3 Comments Tags: , ,

When I jumped into the startup world in 2000 with Blanketware, we truly believed we had an idea no one else had discovered. So, it was a shock when we stumbled on other startups also focused on the giving users an easy way to find and online services.

Despite our entrepreneurial enthusiasm, the idea of competition, while a reality, wasn’t something we had considered. After all, our idea was so unique and novel, and we were so smart, it was hard to believe someone else could come up with a similar concept.

At first, we were spooked. The open road with no competition had suddenly evaporated. Suddenly, we were looking at companies that were better than us or getting traction we weren’t experiencing. It put us on our collective heels.

In time, however, we recognized competition is one of the harsh realities of doing a startup. While you may like to think no one else has developed a better mousetrap, there are lots people working on the same idea.

I was recently reminded about the realities of the competitive landscape by a friend who has a startup making impressive progress. Over the past few weeks, he has discovered several competitors, including one that has attracted significant users and brands.

In looking at these rivals, my initial reaction was “interesting but not surprising”. To not have competition would be a concern because it suggests the idea may be ahead of its time, it hasn’t resonated with users, or there is no demand for your product.

Competition is healthy because it forces a startup to be aggressive, pro-active and focused on doing a better and/or different job to meet the needs of customers. A good idea will only get a startup so far, it’s how you develop and push the idea that matters.

Another important consideration is having an idea and starting a company is the easy part. In the scheme of things, it’s easy to develop technology, hire employees, create a slick logo and raise some money.

The hard part is execution, which involves the combination of technology, marketing and sales to create a viable business. This is where many startups with great ideas go off the rails because they can’t make the leap from idea to business.

For startups, it means while there might be rivals with impressive looking Web sites and customers, it doesn’t necessarily mean they’re executing. At the end of the day, he or she who executes the best wins.

Bottom line: Don’t be afraid of competition. Recognize it, learn from it, leverage it…and focus on executing better.

Less Wireless Competition in Canada?

By Mark Evans in Wireless 1 Comment Tags: , , ,

Now that a federal court has ruled that Wind Mobile’s ownership structure doesn’t comply with Canada’s foreign ownership rules, one of the options being openly discussed by analysts and Wind is the possible consolidation of the wireless market. This could see Wind acquire one of the new players – Mobilicity and Public Mobile – so Wind can get back onside.

How ironic given the effort made to introduce more wireless competition. If consolidation became a reality, the wireless market could quickly revert to its former self with maybe, at best, a few new players.

It raises the question about how long any kind of competition – wireless or broadband – can really exist in Canada without foreign ownership rules being relaxed. Right now, the biggest problem facing competitors is there are few buyers for their companies and, as important, a limited number of investors. With few financing options, selling out to one of the incumbents is a strong possibility, which means less competition.

Amid the speculation about Wind’s future, it is important to remember that consolidation is nothing new to the Canadian market. Microcell, for example, was the new kid on the block that shook up the landscape with lower prices. Then, it ran into financial problems and filed for bankruptcy protection before it was acquired by Rogers.

The federal government allowed the transaction to go through even though it meant a major competitor was going to be swallowed up by an existing competitor. A couple years later, the government then decided Canada needed more competition.

If you’re at all confused about what’s the horizon, you are probably not alone. The biggest question is whether consolidation is inevitable or a healthy scenario. Is this what the government envisioned when it decided there had to be more wireless competition?

Do Consumers Want Canada’s New Wireless Players?

By Mark Evans in Wireless 4 Comments Tags: , , ,

In theory, more competition in Canada’s wireless market is a good thing because it will encourage the industry to become more innovative and, hopefully, it will drive down prices, which rank as the highest in the world.

The question, however, is whether consumers are interested in Canada’s new wireless players, which have emerged to compete against the three large incumbents – Rogers, Telus and Bell. So far, it doesn’t look like consumers really care much about the new competitors, which includes Wind, Public Mobile and Videotron.

Earlier this week, Wind CEO Tony Lacavera said the company has attracted about 140,000 customers. On the surface, it looks pretty good but it does appear the company has enough traction to reach its goal of 1.5 million customers by the end of its third year of business. In Quebec, Videoton only attracted 8,400 wireless customers in the third-quarter, failing to meet the 25,000 to 30,000 expected by analysts.

While the new wireless players will talk about the progress they are making, the harsh reality is Canada’s wireless landscape is a challenging place to establish a foothold when you consider how long the incumbents have been able to establish themselves. While the new players are valiantly trying to capture the attention of consumers, the incumbents are aggressively counter-attacking every move the new players make. A blatant example is Rogers’ launch of the low-cost Chattr brand earlier this year.

Maybe the the new wireless competitors need more time to win over consumers and position themselves as alternatives. Perhaps it is a matter of consumers being able to free themselves of long-term contracts before being able to consider alternatives. It could be that the new players need to offer cool smartphones given this is where the market is rapidly heading.

But any you want to cut it, Canada’s wireless market is, on the surface, more competitive but the bigger question is whether Canadian consumers are willing to enthusiastically embrace the new competitors.

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